When it comes to selling your home, you have to spend money to make money. Land transfer taxes. Lawyer fees. Mortgage discharge costs. But your biggest cost? Likely your real estate agent’s commission.
Canadian sellers pay between 3 and 7 per cent of their home’s selling costs to their real estate agent, which is then split with the buyer’s agent. And that adds up, especially in the nation’s hottest markets; with the average selling price in Toronto coming in around $613,000, the cost of commission is high.
Also read: The Perfect Pro: Your Guide to Working With Mortgage Professionals
However, the way commission rates are charged and the amount you’ll pay vary across the country. The typical rates per province are as follows:
- British Columbia = 7/3 per cent (7 per cent on the first $100,000, 3 per cent on the remainder)
- Alberta = 7/3 per cent
- Saskatchewan = 5 per cent
- Manitoba = 5 per cent
- Ontario = 5 per cent
- Quebec = 5 per cent
- New Brunswick = 5 per cent
- Nova Scotia = 5 per cent
- Prince Edward Island = 5 per cent
- Newfoundland = 5 per cent
Source: From comFree.com
The Power of Negotiation
What many Canadian home sellers don’t know is that they can try and negotiate the rate of commission — rates aren’t set in stone. Many agents, of course, aren’t interested in making less money on a sale. Still, it’s worth a discussion; even a 1 per cent reduction could save you thousands of dollars. Have the discussion with each agent you meet with. Some will charge a percentage, while others will charge a flat rate. Be sure to ask about the services you’ll receive in return; some agents may provide less marketing services for a lower commission.
Sellers have other options as well, like discount rate brokerages. One Percent Realty, a full service brokerage, charges a discount flat rate commission of $6,900 ($3,000 of which goes to the buyer’s agent) for any home under $600,000 and a rate of about one per cent, plus $900, for any home over $600,000.
The For Sale By Owner Route
You can, of course, always sell your house yourself. Experts recommend engaging the services of an appraiser to help set the best price for your home and of a broker who charges a flat rate to post your listing on REALTOR.CA. Even after paying for those services, plus for a lawyer (who must close your transaction), you’ll still save thousands of dollars. Or you can use a service like PropertyGuys.com for the best of both worlds. For a set price, PropertyGuys.com will have an appraiser help price your home, then list it on MLS and have a lawyer assist with the legal requirements.
Also read: How for Sale By Owner Works